ECE joint venture plans EUR 1 bn investment in Russia and Ukraine

ECE Projektmanagement, the German inner-city shopping centre developer, and US-based Developers Diversified Realty (DDR) have set up a joint venture to develop shopping centres in Russia and Ukraine. In a joint statement, the parties said the joint venture has EUR 225 mln in equity capital and 'will realise shopping centres with a total value of up to EUR 1 bn over the next five years.'

DDR, which is headquartered in Ohio, has put up 75% of the equity capital and ECE, which provided the remainder, is responsible for shopping centre development, leasing, general planning and management. The German company has already secured two projects in the Russian cities of Yaroslavl and Ryanzan. In Ukraine, ECE is actively working to secure land plots and joint venture agreements in Kyiv and major Ukrainian cities. The first project is in Yaroslavl, a city of 600,000 people on the Volga Rover, about 250 kilometres north-east of Moscow. ECE is building a 60,000 m² Western-European style mall there for an estimated cost of EUR 150 mln. In Ryazan, population 500,00, about 180 kilometres south-east of Moscow, ECE is developing a 60,000 m² shopping centre in partnership with Czech-based ECM Group. The estimated cost is EUR 100 mln.

ECE board chairman Alexander Otto commented: 'The joint venture makes ECE one of the first big international developers to gain a foothold on the Russian and Ukraine shopping centre market. We have been studying both markets very closely for several years and have subsidiaries in Moscow and Kiev.' ECE has 90 shopping centres under management with annual combined sales of over EUR 10 bn in Germany, Turkey, Poland, Hungary, the Czech Republic, Austria, Greece and Qatar. A further 22 shopping centres are under construction or in the planning stage. DDR owns and manages over 800 retail properties in 45 US states, plus Puerto Rico and Brazil.